An appraisal technology firm is suing a startup founder, claiming the nascent rival used commercially available artificial intelligence tools to recreate its products.
True Footage sued Automax AI and founder Humza Ahmed last week for fraud, among other counts, in a California federal court, looking to stop the startup from profiting off their new appraisal solutions. The lawsuit says Ahmed fraudulently signed up for True Footage's solutions, including its TrueTracts product, and used
The lawsuit was
The complaint described Ahmed as a "college student so desperate to participate in Silicon Valley's startup culture that he would defraud a market leading company to get access and copy its product and then attempt to pass that copy off to investors as his own work."
The prestigious Y Combinator startup accelerator invested in Automax last fall, and True Footage claims Automax today is charging certain appraisers $30 per appraisal to use its replicated "Copilot" product. True Footage, founded in 2019, is seeking a full accounting of Automax's revenues, but it did not specify the potential damages at stake in the case.
Neither company nor attorneys for True Footage responded to requests for comment Monday.
What True Footage claims
True Footage touts its TrueTracts tool as analyzing appraisal data in an easily digestible format for appraisers. The company says it registered all the computer code behind its product.
Ahmed, a former university student, began working on Automax in school, the suit claims. He dropped out, raised some seed money and successfully applied to the Bay Area-based Y Combinator, which invests $500,000 in startups for a 3-month program.
Under pressure to showcase a worthy product, Ahmed took a shortcut by copying True Footage's products, the company suggests. Ahmed allegedly signed up for True Footage last October by falsely declaring he was a member of six Bay Area Multiple Listing Services, and shared his account credentials with other Automax employees.
One Norway-based software engineer copied every aspect of TrueTracts the company could gain access to, according to the suit. Meanwhile Ahmed worked with an unnamed appraiser to use their real MLS credentials to access additional TrueTract interfaces for property-level analyses.
True Footage claims Ahmed and his team used one or more unnamed LLMs to replicate TrueTracts in part by copying numerous front-facing web components, such as Javascript and cascading style sheet (CSS) files. Ahmed also never performed an actual appraisal on his True Footage account.
"What resulted was a rote copy of TrueTracts that Ahmed mislabeled 'Copilot' and misrepresented as his own work to secure several million dollars in investment at the end of the program," the suit reads.
The suit includes screenshots of similar features on the competitors' sites, including a heatmap for comparable properties, and a lengthy methodology that is almost verbatim, with "nominal" rephrasing.
Confronting the rival
True Footage said Ahmed violated multiple of its terms of service, and says it sent the founder a cease-and-desist letter in late March. Ahmed allegedly asked the company to hold its actions in abeyance while he prepared a defense, but presented a sales webinar to appraisers the following day.
"Defendants continue to deflect, providing strong indication that Ahmed or others have tampered with or destroyed evidence relating to their wrongful acts," wrote attorneys for True Footage.
The Austin-based True Footage earlier this month announced the closing of a $40 million Series C funding round. The company says it employs hundreds of appraisers across the country and partners with seven of the nation's 10-largest mortgage lenders.
